Google's storage pricing model combines the self-serving features of cell phone and ISP pricing

Here is Google's report of my storage utilization. It says I've not used any of my Picasa storage, but when I go to Picasaweb, I am told that I've used 84% of my one gigabyte. (I like the first result best, but I really have used most of my allocated gigabyte).

But, that reporting discrepancy is a minor bug. A more fundamental problem is that Google differentiates between my storing images and video (Picasa), email messages with attachments (Gmail) and arbitrary files (Google Drive).

That makes as much sense to me as differentiating between voice bits, data bits and text message bits on your cell phone bill. It's all bits.

(I am waiting for the water company to begin charging me different rates for my drinking, showering and car-washing water).

But, wait, there's more. Checking Google's storage pricing policy, we learn that pictures and videos you upload from Google Plus do not count against your Picasa limit and Google docs do not count against your Google Drive limit. Etc. (I said "etc.," because I got tired of reading the fine print).

That reminds me of Comcast not counting their own video material against download caps.

Google -- this seems a bit evil -- please unify your storage policy.

Superbowl streamed -- pirates do IPTV better than NBC

When I reported that the Superbowl would be streamed this year, I saw it as a milestone on the road to IPTV.

I was one of the 2,105,441 people who watched the stream on NBC.COM. I tuned in out of curiosity, but after watching for a few minutes and taking a few screen shots, I turned my computer off and watched the game on TV. (NBC reports that the average veiwer remained online for 39 minutes).

I was not impressed. The action was in a small window surrounded by ads and statistics on a black background. The viewer could switch camera angles by clicking on the insert window on the upper right.

IPTV done poorly -- by NBC

It was too busy and too small for my taste. There were also seemingly constant commercials and other distractions. I did not tune in at the very start, but by the third quarter, the Internet stream was a quarter behind the TV broadcast.

On the other hand, spokesmen for NBC and the NFL were pleased.

Kevin Monaghan, SVP, Business Development & Managing Director Digital Media, NBC Sports Group was pleased by the "record traffic that grew throughout the event." He was also happy with "record high engagement numbers" referring to nearly two million camera angle switches.

Hans Schroeder, NFL, SVP, Media Strategy and Development called the live stream "a tremendous success."

They might have been pleased, but I expected more because I have seen better live streaming of a sporting event. The basketball game shown below filled the laptop screen and was identical to and only four secnds behind the TV broadcast shown behind it.

IPTV done better -- by pirates

One small hitch -- the basketball game was pirated.   NBC and the NFL should check out the music industry experience with pirates. A good way to stop pirates is to offer people convenient, high quality content at a reasonable price.

Perhaps TV executives should think of pirates as market research consultants who are showing them what the public wants.  NBC needs to learn from the pirates that the distinction between "TV" and "the Internet" is broken -- it's all bits.

The information-service business model is costing us dearly

The incumbent Internet service providers have a service-based business model, differentiating between Internet, telephone, text-message, basic television, premium television, voicemail and other services.

This enables them to vary prices to maximize their profit and discourage competition. For example, they charge exorbitant fees for text messages and discourage Internet video by charging extreme prices when download caps are exceeded.

This differentiation between types of data or service is arbitrary. It is all bits.

For example, the NBA playoff game on Sunday was televised and streamed over the Internet. Both came over the same cable:



As we see, the television coverage, including the ads, is being delivered over the Internet with a four second delay. The Internet image quality is below that of the television signal, but that will improve when US Internet speeds catch up with the rest of the world.

The incumbent telephone and cable companies profit from their service-oriented business model, so they will resist becoming information utilities, delivering undifferentiated bits.

Can they sustain that position in the long run? Would we tolerate a water company that differentiated between drinking and washing water or a gas company that differentiated between heating and cooking gas?

Senator Kohl questions cellular competition

We discuss the competitive nature of the US cell phone and ISP markets. Generally speaking, ISPs and cell phone companies oppose regulation, arguing in favor of private enterprise and competition. Is there competition in these markets? Let's look at text messaging.

In 2005, each US cell phone company charged 10 cents to send or receive a text message. No doubt they had different cost structures and strategies -- you might have expected one of them to cut their price to try to win new customers. Well they did change their prices -- today they are all charging 20 cents.

Do you find that surprising in this competitive marketplace? Do you suppose their costs rose during those years? Its only fair that they cover their costs, right?

Text messages are transmitted in 140 byte (1,120 bit) packets -- 1,120 bits delivered for 20 cents. How much would it cost to deliver a recorded song at that rate?

Let's be conservative and assume the typical song is 2 minutes long. If it were encoded at 256k bits per second, the rate Apple iTunes uses for premium recordings, that would be roughly 30,720,000 bits -- the equivalent of 27,429 text messages. If a music vendor like Apple charged the same rate per bit as a text message vendor, a song would cost around $5,486 to transmit, yet Apple manages to sell and deliver songs, and make a profit at $1.29 per song.

US Senator Herb Kohl (D-WI), chairman of the Senate Antitrust Subcommittee, recently asked the presidents and chief executive officers of the four largest wireless telephone companies to justify their text message rates. In a letter, Senator Kohl requested an explanation from Verizon Wireless, AT&T, Sprint and T-Mobile, which collectively serve more than 90 percent of the nation's cellular phone users.

Do you think the cellular market is competitive? The Internet access market? What do you think Senator Kohl is planning to do?

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Update 3/13/2015

WhatsApp reports that it now has 700 million monthly active users sending 30 billion messages a day. For comparison, the global SMS system sees about 20 billion messages a day.

Here is the decline of SMS in several nations:

Senator Kohl's call for action went nowhere, but he needn't have worried -- no monopoly lasts forever.